Oct. 16 (Bloomberg) -- Thailand’s government bonds fell,
pushing the 10-year yield to a two-week high, after central bank
Governor Prasarn Trairatvorakul said there is no need to cut
interest rates. The baht was little changed.

Inflation remains “benign” and the economy will grow 5.7
percent this year as domestic demand counters a slowdown in
exports, Prasarn said Oct. 13. Expansion was 0.1 percent in 2011
as the nation was affected by the worst flooding in almost 70
years. The Bank of Thailand will keep its benchmark rate at 3
percent tomorrow, according to 20 of 23 economists surveyed by
Bloomberg, with three predicting a 25 basis point cut.

“The yields aren’t falling for now with growing
speculation of no rate reduction this week,” said Tohru
Nishihama, an economist at Dai-ichi Life Research Institute Inc.
in Tokyo. “Still, the impact from the BOT decision will be
rather limited.”

The yield on the 3.65 percent bonds due December 2021 rose
one basis point to 3.51 percent as of 3:05 p.m. in Bangkok, the
highest level since Sept. 28, according to data compiled by
Bloomberg. The yield advanced two basis points, or 0.02
percentage point, yesterday.

Consumer prices rose 3.38 percent in September from a year
earlier, compared with a 2.69 percent increase in August,
official data show.

The baht traded at 30.67 per dollar, compared with 30.68
yesterday, according to data compiled by Bloomberg. One-month
implied volatility, a measure of exchange-rate swings used to
price options, was unchanged at 4.27 percent.